Brand Architect

Luxury Brands Face Multiple Challenges

Luxury Institute, the New York-based ratings and research organization, recently released the findings of their latest research which painted a difficult time for luxury goods as the recession drove away aspirational buyers and affluent buyers became more discerning.

Some of the findings from the Luxury Institute's State of the Luxury Industry 2009 Survey, reported by brandchannel, are:

-- Seventy-seven percent of high-end shoppers "agreed that luxury is less important in today's economy."

-- Fifty-eight percent said they are "spending more on essentials rather than on what they want"; 56 percent said they are "being more practical about spending."

-- The majority of affluent consumers aren't big luxury shoppers. Pre-recession, most of the luxury market's power came from lower-income aspirational buyers.

-- Many affluent consumers said that they're primarily interested in quality and service, which they consider hard to find in luxury goods.

-- The rise of discounting has damaged people’s brand perception.

Vampires Drive Volvos

Constantly in search of a sexier image, Volvo are turning to ever-popular vampires to give them some street credibility. The Swedish car manufacturer has placed their new XC60 in the new vampire movie The Twilight Saga: New Moon.

The car, driven by vampire character Edward Cullen, features prominently in the movie leading to Ogilvy Entertainment to comment “Edward Cullen makes the Volvo XC60 look like a million bucks, similar to the effect that James Bond had on the Aston Martin”. (I don’t know whether Ogilvy were involved with the brand placement).

Besides the brand placement, Volvo have added some transmedia thinking by creating a web and social media presence to promote the car and contest with prizes ranging from tickets to meeting the movie’s cast to winning a XC60.

Fans have to answer a series of questions with clues scattered across social media sites like Twitter and Facebook. The fans are encouraged to chat with others to solve the puzzles, thereby creating communities around the competition.

Volvo get brand placement and social media: a good step towards the elusive street credibility and sexiness they desire.

Sorrell: WPP No Longer an Ad Agency

Global marketing services group WPP is "certainly not an advertising agency any more" WPP head Martin Sorrell told the ad:tech New York conference, as he recommitted the group to a digital future.

Sorrell said WPP would be more focussed on developing Eastern markets, more involved in digital media and towards helping clients quantitatively analyze media spend. "WPP's strategy can be summed up in one simple sentence: new markets, new media and consumer insight," he said.

Digital spending, which already accounts for 25% of WPP’s $14 billion revenues, would increase significantly over the next five years with brands allocating over 20% of total spend to digital by 2015, up from the current 13%.

Sorrell blamed the current lower spend on the fact that senior people in the marketing services industry did not understand the potential of digital well enough and were not giving their clients the best advise about media spend.

Repositioning WPP away from being an ad agency, Sorrell said that “technology was at the centre of its development”. Whilst Sorrell is committed to a digital future for WPP, this is not the first time and won’t be the last time that ad agencies reposition themselves. Remember when they were no longer ad agencies but idea companies.

When the descriptors have been said and done it is about brand strategy, brand positioning, brand communication, brand interaction and brand resonance.

Advertisers Looking for New, Cheaper Ad Agencies

In a positive sign that the ad industry may be emerging from the recession, major advertisers like General Motors and Emirates Airlines are shopping around for new advertising agencies. But, they want the agencies to work for less.

“Ad executives and new-business consultants, who are hired by marketers to help them find new agencies, say an effort to tamp down ad agencies' fees is playing an increasingly important part in the reviews,” The Wall Street Journal reported.

"’Big corporations want more for less and are putting pressure on agencies to cut services or cut fees to win their business,’ Dick Roth, who heads New York-based new-business consulting firm Roth Associates, told the newspaper.

“Over the past few years, the process of searching for a new advertising or media-buying firm has dramatically changed. Companies are involving their procurement departments in the process more, rather than leaving it up to their marketing departments. That's part of a broader effort to wring costs from advertising and marketing, new-business consultants say.”

"’The chief procurement officer has become more important than the chief marketing officer inside some companies,’” Joanne Davis, a new-business consultant in New York, told The Wall Street Journal.

As Journalism Falters, Journalists Are Bypassed

As the body blows of closed publications, retrenched staff and shrinking editorial space batter journalism, the profession is facing another looming threat: being bypassed.

Long the channel through which PR agencies told their clients’ stories, beleaguered media organizations are seeing PR agencies reaching directly to the consumers, often through social media channels like YouTube and Twitter.

The consequences are obviously profound for media organizations but also for consumers who are now subjected to brand information sans the filtering and ethical consideration typically employed by professional journalists.

Communicating directly with the consumer is also very different from communicating via the media and the new practice brings PR agencies into more direct competition with ad agencies that typically owned the direct to consumer communication channel in the marketing services world.

Interesting times and a wake-up call to anyone who believes the marketing services industry is going to emerge from the recession unchanged.

Brands Benefiting From a Recession

Famous Brand, a quick-service restaurant and casual dining franchisor in South Africa, has just posted a 14% increase in revenue for the last six months and analysts attributed part of that growth to customers downgrading in a recessionary climate.

"Things are very tough for the fine-dine restaurants, and that could be the reason why (Famous Brands) were ale to grow their business," RMB Asset Management industrial analyst Myuran Rajaratnam told Business Day newspaper.

Famous Brands is not the only brand to benefit from consumers downgrading and, with predictions that many consumers will not return quickly to their old consumption patterns, the outlook for the beneficiary brands is good.

However, this does not mean the brands can take things for granted. Downgrading consumers are looking for value and that must be consistently delivered. Brands will also benefit from appearing to be a little more expensive than they actually are and thereby making making the downgrade a little less obvious for image-conscious consumers.

Debate About Brand Managers Misses the Real Issue

Lots of debate about the title of brand manager and exactly what the job should be: Much of it missing the point.

Forrester, better known for its technology research, started the debate by suggesting “brand managers” should become “brand advocates” with a more consumer-centric approach and less loyalty to media channels and agencies.

Not to be outdone, BusinessWeek’s David Kiley, borrowing from former McDonald’s CMO Larry Light, said they should be known as “brand editors” and focus on offering different brand content and not ads. Consultant Denise Lee Yohn chipped in that she had, years earlier, argued that “brand managers” should become “brand operators” and drive brand operationalization.

Management cartoonist Tom Fishburne picked up on the debate and offered this cartoon which suggests that the self-important brand manager has no real power. That resides with the consumer who probably don’t know what a brand manager is.

 

Tom probably comes closest to the truth and that is that brand managers are typically junior to middle managers who wield far less influence than they would like to believe. So debating about whether they are “brand advocates” or “brand editors” or “brand operators” misses the point that brand strategy resides with the organization that owns the brand.

(Before there is an uproar that the consumer owns the brand. They don’t. They influence and determine the success or failure of a brand but ownership, which implies the ability to make decisions that impact directly on the brand, resides with the entity that has legal rights to the brand.)

All the comments about flexibility and operationalization and producing coherent but different brand content are valid, but they reside within the organization that owns the brand and with all the employees whose work impacts on the brand and not just the brand manager.

The brand manager is a tactical cog in a larger organization that must be flexible and responsive to the market. The focus should therefore be on the more important question of brand strategy equals business strategy rather than what the brand manager is called and does.

The Power of Brand Icons

The print ad above is for the new Duracell ultra battery, which Duracell proclaim as their most powerful battery to date. A series of print ads depicts powerful entities such as the rhinoceros, a Sumo wrestler, and a tornado. Rather than ditch the iconic Duracell bunny, which has served the brand with distinction, thousands of pink bunnies make up the powerful entities (click on the image to enlarge it). The image of the bunnies coming together into something bigger effectively carries the message of the ultra battery being more powerful. The campaign was done by the Paris office of Ogilvy and the I spotted the ad on Adgoodness where you can see the other executions.

When Brand Reputations Fail

I like a mobile phone to be able to make and receive phone calls. Which is why, based on recommendation and brand reputation, I choose a Nokia 6550 Slide, a relatively feature-free phone that was promised to be robust and provide reliable telephony.

So when, less than 18 months into ownership of the phone, it started to freeze and shutdown without warning I headed off to the nearest dealer to find out why. And that is where the brand reputation rapidly went from good to bad.

After my first sentence of explanation, the shop assistant stopped and said it was a common software problem and if they took the phone in I should have it back in a couple of weeks in working order. A common problem? That means Nokia is not as reliable as I had believed.

My new, downgraded perception of the brand was further cemented when every time I mentioned the problem I heard stories of frequent failures by Nokia phones and advice that the software upgrades didn’t always work. The online forums also told tales of woe.

Nokia is still a much-loved and used brand, but its reputation has been tarnished for me. Not so much that my phone failed but that its failure was greeted with a matter-of-fact shrug of the shoulder that is typical of Nokia phones.

Positive brand reputations are built over a long time. Negative brand reputations happen much quicker. The Nokia is sitting in my drawer while I sync my new mobile phone.

It is Not Viral Until it is Viral

A viral campaign isn’t viral until it goes viral. Viral is a measure of success of a brand communication not a foregone conclusion. That unfortunately doesn’t stop brand managers and their marketing service agencies from speaking about their viral campaigns as if achieving viral status was as guaranteed as placing a print ad in a magazine.

Tom Fishburne, my favourite cartoonist, encapsulates the viral mania perfectly in the cartoon above. In his notes, Tom writes:

“This year, it feels like every marketing plan features viral video as a tactic. Yet, many brands treat these videos in the same dull way as placing a grocery cart ad or staging an on-pack promotion. They feel like infomercials. These brands assume that if they build it, viewers will come (and watch, and share).

“Brands sometimes forget that videos become viral, not by how interesting the content is for the brand, but by how interesting the content is to the viewers. They also forget that ‘viral’ is, by nature, unpredictable.”

Don’t Forget the Brand

Social media features prominently in Sagacite’s consulting, as it does for many consultancies focused on brands and branding, and nearly always we find the third-party brand to be an afterthought which makes their introduction into a social media environment fraught with difficulties.

In the evolution of most social media endeavours, first came the bells and whistles technology. Then the most successful social media applications / services built armies of users in the hundreds-of-thousands and millions. Those applications / services that survived settled into a pattern of usage and evolution and all the time mounting development and operating costs.

Over time the question inevitably turned to how the social media application / service could make money to pay for the costs and make money for its owner. Most times, the answer was through third party brand advertising in one form or another.

Problem was and is that introducing brands into an established social media environment either went unnoticed or upset the members who saw the brands as an opportunistic and unwanted intrusion. This was exasperated by some poorly conceived strategies such as Facebook’s Beacon peer-based marketing idea.

A solution is to not to forget third-party brands at the outset and factor in communication and engagement channels for them from the beginning even if the social media owner needs to run their own ads or give the space away whilst the user base is built. That way the brands are part of the entire experience and users are more likely to accept their presence and engage with them.

Great Creative Search Engine

I have just, thanks to Creativity Online, come across this great creative search engine / aggregator that was designed by students for the 2010 D&AD Student Awards. Called Creative Search, the engine aggregates results from Wikipedia, Google, Flickr, Twitter, YouTube, iTunes, Amazon and Instructables. I have taken it for a quick spin on the obvious and not so obvious searches and like the results.